Once the capital of British India and the second city of the Empire, Calcutta is not even regarded as a major Indian city today and it is known abroad, if at all, only for its supposedly bestial poverty. Calcutta is certainly ugly, overpopulated, dirty, chaotic and poor – but, whatever the missionary types might claim, no more so than any other Third World town.

Amit Chaudhuri's quirky new book delves beneath the drabness and poverty. Blending reportage, meditation, history and critique, it draws a fascinating portrait. It is especially rewarding because of the author's ambivalent status. Although familiar with Calcutta from childhood and fluent in Bengali, Chaudhuri never actually lived there until recently. Even now, he spends half of every year teaching in the UK. An insider but also an outsider, he approaches the city from a unique perspective. Calcutta should be mandatory reading not only for those unfamiliar with the place but for those who imagine they know it well.

The book records Chaudhuri's experiences during his first two years in the city after moving from England. Rather than focus on Calcutta's lower depths, he brings out its true diversity. I had no idea that the kind of Anglo-Bengali (Inga-Banga) Calcuttans, to whom Chaudhuri devotes one of his finest chapters, still existed. Speaking authentically British English at home and treating the Chaudhuris to afternoon tea with (delectable) sandwiches, the Mukherjee family, predictably, is doomed and has to give way to dodgy representatives of the new Indian economy.

The Inga-Bangas are easy to deride. Even the sandwiches tempted me only briefly. But Chaudhuri, with delicate, ironic strokes, transforms the Mukherjees into protagonists of a very Calcuttan Cherry Orchard, whose world is collapsing around them while they live, with increasing difficulty, as they always did, vaguely sensing the coming of a cruel new age but incapable of making sense of it, let alone adapting.

Not that the new world is less weird than the old. The wealthier denizens of Calcutta have embraced Italian cuisine but the few Italian chefs who do come to work there tend to leave precipitately. Chaudhuri unearths a little-known saga of provincials playing at being cosmopolitan. While the older generation swore by fictitious Continental dishes like chicken tetrazinni, the new lot daub their pizzas with ketchup and indulge in other abominations that reduce Italian chefs to despair.

As I chuckled, I wondered how this could be contrasted with the emergence of pricey restaurants specialising in traditional Bengali food. There was just one such place in my younger days, but now there are so many that one is justified to call it a trend.

Perhaps the greatest passion of Calcuttans after food is politics, but again the style and tenor have changed. Chaudhuri goes on a tour of polling stations during a landmark election that ended 35 years of unbroken "Communist" rule in Bengal, replacing it with a populist regime lacking, as became evident rapidly, in the slightest administrative competence. Chaudhuri tries to identify the forces behind the change but for once, seems to be slightly out of his depth. His laconic interviewees fob him off with platitudes and he reveals an intellectual's inability to comprehend the sheer bloody-mindedness of street politics.

Quite the opposite is the case with Chaudhuri's reflections on the past of Calcutta. Whether it is a rhapsody on a French window that he rescues on a whim from a demolished building, or a mental quest through the crowded streets of North Calcutta for the monuments of the much-hyped Bengal Renaissance, Chaudhuri's trysts with the past are entrancing in their lyricism, and simply stunning in their intelligence and percipience.

Professor Chandak Sengoopta teaches history at Birkbeck College, London